The Palm Beach Post

A wealth-friendly place
By Jeff Ostrowski, Palm Beach Post Staff Writer

Florida's reputation as a low-tax state remains well-deserved, according to a survey by Bloomberg Personal Finance magazine.

Florida's tax bill for families is the nation's eighth-lowest, while the burden for retirees is 15th-cheapest, the magazine says in its May issue.

The survey looked at each state's bill for income, property, sales and other taxes. It calculated how much a typical taxpayer would pay.

Florida, one of a handful of states with no income tax, is especially kind to those earning salaries. For retirees, Florida's tax burden is higher because of the state's intangibles tax, which affects stocks and bonds and takes a percentage from residents with six-figure investment portfolios.

Wyoming has the lowest taxes, according to Bloomberg, while Rhode Island has the highest. The magazine acknowledged that not everyone chooses where to live based on taxes.

"I'm sure Wyoming is beautiful, but it's not somewhere I'd like to live," said Richard Newman, a Boca Raton financial planner.

Newman lauded Florida's low taxes as a lure for many moving from high-tax states. Some northern states have lowered their estate taxes to stanch a flow of wealthy people moving to Florida and other low-tax states, he said.

Not everyone considers low taxes a blessing. Florida's per capita school spending is among the lowest in the nation, and teacher salaries lag the national average.

"Our tax structure that we use to fund education isn't stable," said Shelley Vana, president of the Palm Beach County Classroom Teachers Association. "We don't fund education first. It's always the afterthought."

If Florida doesn't improve its schools, the state will find it difficult to lure high-paying employers, Vana said.

Florida relies on sales taxes for much of its revenue, but those sales dwindle during recessions such as last year's. Senate President John McKay, R-Bradenton, this year tried to overhaul the state's tax system by taxing services such as landscaping, dry cleaning and accounting, but opposition from business groups killed the proposal.

Gary Hines, senior vice president of the Palm Beach County Business Development Board, said a few companies that considered moving here over the years decided not to because of crowded schools. But the state's low taxes also is a strong selling point.

"They want the lowest possible tax burden," Hines said. "But they also want the best schools for their employees' children."